Chart of the Week: AUD/USD bears back in play
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UNLOCK OFFER- AUD/USD bears are back in charge for the open in anticipation of a break of 4-hour support.
- A break of support will finally open prospects of a daily and weekly bearish continuation.
Since June, AUD/USD has been analysed as technically bearish in a series of articles:
- Chart of the Week: Commodity currencies in focus, bears in control
- AUD/USD downside compelling for the days ahead
- AUD/USD Price Analysis: Bulls coming up for their last breath?
- Aussie Covid spread tainting bullish appetite in AUD
While there has been a bearish bias, shorts have been squeezed back into the 0.74 area within the constructively bearish deceleration of the correction.
However, Friday's price action was definitely bearish and renews prospects of a downside continuation after all for the week ahead.
From a 4-hour perspective, the price needs to break and close below 0.7330:
How probable are the chances of that?
Considering the fundamentals alone, there is a high chance that the price moves lower.
However, from a technical standpoint, the chance is even likelier taking into consideration the US dollar's technical foundations as well as the longer-term charts in AUD/USD.
Starting with those, AUD/USD is breaking the monthly support as follows:
0.7413 was broken and the monthly candle ended bearish, with the close below old support.
This leaves prospects of a downside continuation on the cards for the month ahead.
From a weekly perspective, the bears can seek a deeper test of bullish commitments from within the mid-November range between 0.7220 and 0.7340.
From a daily perspective, the bearish engulfing close is highly bearish for the open:
US dollar analysis
In prior analysis post the Fed drop, it was argued that the price would revert to the upside again as follows:
Live market, 4-hour & daily chart, DXY
The price tested very deep into demand but has now started to turn higher in a correction that could run for some distance according to the daily chart:
First and foremost, the M-formation is a bullish structure. The 38.2% Fibo aligns with old support as the first confluence of resistance before the 61.8% confluence with the M-formation's neckline lows.
- AUD/USD bears are back in charge for the open in anticipation of a break of 4-hour support.
- A break of support will finally open prospects of a daily and weekly bearish continuation.
Since June, AUD/USD has been analysed as technically bearish in a series of articles:
- Chart of the Week: Commodity currencies in focus, bears in control
- AUD/USD downside compelling for the days ahead
- AUD/USD Price Analysis: Bulls coming up for their last breath?
- Aussie Covid spread tainting bullish appetite in AUD
While there has been a bearish bias, shorts have been squeezed back into the 0.74 area within the constructively bearish deceleration of the correction.
However, Friday's price action was definitely bearish and renews prospects of a downside continuation after all for the week ahead.
From a 4-hour perspective, the price needs to break and close below 0.7330:
How probable are the chances of that?
Considering the fundamentals alone, there is a high chance that the price moves lower.
However, from a technical standpoint, the chance is even likelier taking into consideration the US dollar's technical foundations as well as the longer-term charts in AUD/USD.
Starting with those, AUD/USD is breaking the monthly support as follows:
0.7413 was broken and the monthly candle ended bearish, with the close below old support.
This leaves prospects of a downside continuation on the cards for the month ahead.
From a weekly perspective, the bears can seek a deeper test of bullish commitments from within the mid-November range between 0.7220 and 0.7340.
From a daily perspective, the bearish engulfing close is highly bearish for the open:
US dollar analysis
In prior analysis post the Fed drop, it was argued that the price would revert to the upside again as follows:
Live market, 4-hour & daily chart, DXY
The price tested very deep into demand but has now started to turn higher in a correction that could run for some distance according to the daily chart:
First and foremost, the M-formation is a bullish structure. The 38.2% Fibo aligns with old support as the first confluence of resistance before the 61.8% confluence with the M-formation's neckline lows.
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